Alaska Milk prepares to withdraw from stock market

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MANILA, Philippines - The Philippines' largest milk manufacturer will delist from the local bourse following the completion of a Dutch dairy giant’s bid to purchase more shares in the company.

During the company's annual stockholders meeting, Wilfred Steven Uytengsu, Alaska Milk Corp. president and chief executive officer, said Royal FrieslandCampina NV's ownership in the local milk maker will surpass the 90-percent mark when its tender offer period closes in the first week of June.

Alaska Milk will then delist from the Philippine Stock Exchange (PSE) within 60 to 90 days. Its shares may no longer be traded in the bourse beginning August or September.

"The capital markets don't serve Alaska Milk the way they did 15 or 17 years ago when we decided to take the company public," said Uytengsu.

The PSE requires publicly listed firms to have a minimum public float of 10 percent. A six-month suspension awaits companies that don’t comply with the rule by January 1, 2013. Failure to address the matter during the six-month suspension period would merit delisting.

Uytengsu encouraged shareholders to tender their shares since they may not be able to enjoy the company's dividend yield, which has been one of the highest since its inception in 1972.

"We want to invest that money back in the business whether it’s building brands, whether we're acquiring businesses, whether we're launching new products. A lot of the money that went to dividends will go back to the business," he said.

In compliance with regulatory requirements, FrieslandCampina is in the middle of its tender offer for the remaining publicly traded shares at a price of P24 apiece. The Dutch giant raised its investment in Alaska Milk from about 8.1 percent to 68.9 percent following the acquisition of 535.7 million shares held by the Uytengsu family, the founders and controlling shareholders of the local milk maker.

The deal with FrieslandCapina will strengthen Alaska Milk’s position as a regional player, especially once trade barriers drop across Asean in 2015. The Philippine firm may consider exporting its products to Vietnam and Indonesia, complementing the Dutch giant’s presence in Malaysia and Thailand.

"If you look at growth prospects in Southeast Asia, the emergence of our middle-class coupled with population growth really bodes well. When you consolidate that in the region by 2015, it's very exciting. This is the time that you want be in Southeast Asia," said Uytengsu.

Uytengsu described the move to sell the family’s stake as an “emotional” decision.

“I spent 26 years working with the company, 24 of those with my father. I had to really think very deeply on whether or not he would have made the same decision,” he said.

“He did say that if you do the right thing, if you do the fair thing, that’s all you can do. I think we have done the right thing, we have done the fair thing,” Uytengsu added.

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